Pipeline companies compete for routes to markets west and northeast

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The Rockies natural gas industry is being courted by numerous pipeline companies that see a continued need to connect the region's growing supply to markets across the country.

The current focus includes two main routes for Wyoming producers. The first is from south-central Wyoming northeast through the Powder River Basin to the Upper Midwest markets. At least three main pipeline proposals are vying for this route.

The second is from the Opal hub in western Wyoming west to the southern Oregon border. Three proposed pipelines are focused on this route.

Of the multiple proposals in recent months, only one pipeline will likely win in each proposed route, said Brian Jeffries, executive director of the Wyoming Pipeline Authority.

He said the heated competition among pipeline companies at least reveals an industrywide belief that natural gas production in the Wyoming, Colorado and Utah region will continue to grow.

"It tells you the industry, in aggregate - producers, pipelines and end users - believes there will be production growth. Doesn't tell what that production growth is," Jeffries said. "That's what the open seasons are designed to root out."

An open season is a pipeline company's attempt to determine natural gas producers' level of interest in signing shipping contracts.

One factor driving both the westbound and northeast-bound markets is the dwindling natural gas production and supply in Canada, according to Jeffries. TransCanada Corp. has interest in pipelines tying into the Chicago market that will soon have open space available, so it's looking to tap into the growing Rockies region to keep those pipelines full.

That's the driver behind Northern Border's proposed Bison Pipeline.

"Bison will be the shortest path to a major pipeline with available downstream capacity to robust Midwest and Chicago markets," Northern Border vice president and general manager Paul F. Miller said in a prepared statement. "Bison will also offer Northern Border's customers and markets greater supply diversity through direct access to growing Rockies supply."

The same is true of the West Coast natural gas market. TransCanada has a pipeline that cuts through Idaho to southern Washington state that will soon have a dwindling supply of Canadian gas. So it has teamed up with Williams Cos. to potentially tie the proposed Sunstone pipeline from Wyoming to its existing pipeline.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com.

* Last we knew: Several pipeline construction projects are in the works to expand Wyoming's export of natural gas, natural gas liquids and oil.

* The latest: Some six proposed pipelines are competing for two main expansion routes out of Wyoming.

* What's next: Interest from shippers, producers and end users should narrow the field among competitors by the end of the summer.]]->

A lack of pipeline infrastructure sapped an estimated $470 million from the state in unrealized taxes and royalties in 2007, according to figures presented by the Wyoming Department of Revenue.

That's because of a cyclical problem. Every four years or so, production in the Rockies region approaches the export capacity of the pipeline infrastructure.

According to the Wyoming Pipeline Authority, the pace of drilling in the Rockies is expected to overload the region's export capacity again by 2010 or 2011.

Jeffries said no matter who gets to build the next major pipeline expansion out of the Rockies, it might not go into service in time to avoid another costly "price differential" for Wyoming.

"That's where the Pipeline Authority has a great deal of concern," Jeffries said.

He said if the current round of pipeline proposals receives a good response from producers, shippers and end users, the northeast and western routes could go into service sometime in 2011 or 2012. No one knows for sure if that's too late to avoid another natural gas glut in the Rockies.

"You have to look forward four years," Jeffries said. "Once a pipeline situation gets ugly and everybody wants a solution right now, it's too late."

- Dustin Bleizeffer]]->

Here's a look at plans from companies interested in building new natural gas pipelines along two new proposed routes originating in Wyoming:

Southern Wyoming, through Powder River Basin and to Upper Midwest

* Questar Overthrust Pipeline Co. and Alliance Pipeline Inc.'s Rockies Alliance Pipeline: 800 miles of 42-inch-diameter natural gas pipeline from Wamsutter, through the Powder River Basin, and to the Emerson trading hub at the Minnesota/Canada border. Open season begins May 1. http://www.questar.com/news/RAP%20Press%20Release%20FINAL-240308.pdf

* TransCanada/ONEOK's Northern Border Pipeline Co.'s Bison Pipeline: 289 miles of 24-inch-diameter natural gas pipeline from Dead Horse, Wyo., to Morton County, N.D. Initial capacity is 400 million cubic feet per day, with a maximum capacity of 660 MMcfd. Projected in-service date is Nov. 15, 2010. Open season from April 4 to May 16.

http://www.tcpipelineslp.com/news/2008/20080404.html

* TransCanada Corp.'s Pathfinder Pipeline: two segments, 500-mile, 42-inch-diameter natural gas pipeline from Wamsutter to Morton County, N.D., intertie at Northern Border Pipeline Co. system. Initial capacity of 1.2 billion cubic feet per day. Segment 2: an additional 275 miles from the intertie to Noyes, Minn., and Emerson, Manitoba. Expansion capabilities of up to 2 billion cubic feet per day. Open season from April 7 to May 22.http://www.transcanada.com/news/2008-news/20080407.html

Western Wyoming to southern Oregon, West Coast

* Spectra Energy's Bronco Pipeline: 650 miles from southwest Wyoming to Malin, Ore. Initial capacity of 1 billion cubic feet per day. Estimated cost in excess of $3 billion. In-service anticipated for 2011. Open season was from Jan. 10 to Feb. 8.

http://www.spectraenergy.com/businesses/projects/bronco

* El Paso Corp.'s Ruby Pipeline: 680 miles of 42-inch-diameter natural gas pipeline from Opal hub in Wyoming to Malin, Ore. Initial capacity of 1.2 billion cubic feet per day, expandable up to 2 billion. Open season concluded March 20. A review is under way by the Federal Energy Regulatory Commission. In-service is expected to be first quarter 2011.

http://www.rubypipeline.com/

* TransCanada and Williams Cos.' Sunstone Pipeline: 618-mile, 42-inch-diameter natural gas pipeline from Opal hub in western Wyoming to Stanfield, Ore. Initial capacity of up to 1.2 billion cubic feet per day. Open season ends April 30.

http://www.williams.com/newsroom]]->

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